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Frank McCourt haunting Fox in Padres deal

February 14, 2012 | 4:24
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Once upon a time, Frank McCourt and Fox Sports were the best of friends. McCourt needed money to retain ownership of the Dodgers, and Fox was more than happy to give it to him so the company could lock up the Dodgers through 2030.

That was last spring, before Commissioner Bud Selig rejected the deal. When the Dodgers filed for bankruptcy, Fox turned its back on McCourt and aligned with Selig. Fox sued the Dodgers, and in return the Dodgers sued Fox, with fighting extending into two courts before McCourt agreed to sell the team and keep the current Fox contract intact.

McCourt still haunts Fox, however. Fox is weeks away from launching a San Diego cable channel centered on the Padres, but the deal remains in limbo in part because of McCourt.

Fox and the Padres were "close to announcing a new TV deal" last May, according to the North County Times. However, Selig has yet to approve the deal. And, at last month's owners meetings, a decision to approve Jeff Moorad as the Padres' new majority owner was unexpectedly tabled.

The two issues are related. One of the MLB concerns in approving Moorad involved the Fox deal -- in particular, whether the Fox contract provided an up-front payment that Moorad could use to complete his purchase from outgoing owner John Moores.

The proposed contract included an up-front payment of more than $150 million, a person familiar with the deal told The Times.

The relationship between the Fox contract and the Moorad approval was first reported by the Inside the Padres blog.

The revelations of the McCourt divorce trial have prompted Major League Baseball to conduct more stringent examinations of its owners and their proposed deals. The proposed contract between the Dodgers and Fox would have included $385 million in up-front money, with about half reserved for McCourt, his ex-wife and attorneys.

In a statement rejecting the deal, Selig said the "diversion of Dodgers assets for the personal needs of Mr. McCourt ... would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans." (You can read all 11 pages of Selig's official rejection letter here.)

In short, MLB wants TV revenue put back into the team. That might not bode well for Dodgers bidders counting on Fox or Time Warner Cable to finance part of their purchase price.

In the case of the Padres, Moorad told San Diego news outlets this week that "every dollar of the TV deal will be spent of the club."

It is unclear how Fox and the Padres might redo their deal, or whether the owners will reconsider their vote on Moorad in the short term. This much is clear, however: The Padres open the season in seven weeks, and Fox urgently needs MLB approval to avoid launching a San Diego channel without either of San Diego's pro teams.